Gulf Stream Coach Inc. Trial Ends First Week

On the fourth day of a nationally watched trial over toxic fumes in trailers provided to those displaced by Hurricane Katrina, an owner of a firm that made many of the trailers was questioned over apparently misleading answers provided to a newspaper reporter pursuing a story about high formaldehyde levels in the FEMA-provided trailers.

Gulf Stream Coach Inc. co-President Dan Shea appeared in the courtroom on Thursday (Sept. 17) via video testimony, answering questions from plaintiff attorney Tony Buzbee who accused the company of knowingly deceiving the public over the quality of materials used in more than 50,000 trailers, according to the Courthouse News Service.

The trial began Sept. 14 in New Orleans over allegations of sickness caused by high levels of formaldehyde in Gulf Stream Coach trailers distributed by the Federal Emergency Management Agency (FEMA) following hurricanes Katrina and Rita. FEMA-issued trailers were distributed by the thousands for emergency temporary housing following the 2005 devastation of the Gulf Coast.

Along with the maker of the trailers, the distributor, Fluor Corp., is also on trial. Fluor hauled and installed the trailers through contracts with FEMA. Fluor is accused in the ongoing civil trial of negligence in the installation of the trailers, causing damage to the frames of the trailers which in turn is alleged to have exacerbated the formaldehyde problems.

“Did you tell Steve Lidy not to lie to the press when you read his e-mail and saw what he wrote to the press? Did you call and correct him?” asked Buzbee.

The e-mail in question was written by Lidy to Laura Halleman from the “Madison Courier.” Lidy references his email to Halleman in a July 2007 e-mail to Dan Shea, saying Halleman, “wanted to know what steps” had been taken by Gulf Stream “to fix the FEMA formaldehyde problem.”

Steve Lidy goes on to tell Dan Shea, “I told her we are ahead of the curve, that for years we have been using (low formaldehyde) building products to meet & exceed the manufactured housing standards. She got snippy at me saying our trailers are showing high levels. I asked her to be sure they are our trailers since there are trailers from many manufacturers in that region and then I referred her back to FEMA for any further questions and answers.”

In earlier testimony, Dan Shea said that in spring 2006 he became aware that possibly 15% of the interior wood products, supplied through Adorn, that were used in Gulf Stream trailers were not the LFE (low formaldehyde emitting) quality he and his brother Jim Shea Jr. insisted Gulf Stream Coach exclusively used in construction of its FEMA-supply travel trailers. Due to the nature of manufacture and the glues used in processing, woods used in travel trailers and manufactured homes tend to have high formaldehyde levels.

Almost every component inside the Gulf Stream Coach FEMA trailers is made from wood. The walls, cabinets, kitchen table, master bed and bunk beds are made of wood or wood components. Dan Shea additionally testified that somewhere around the same time, he and his brother Jim Jr. also realized that two-thirds of the wood they were supplied from Weyerhaeuser and Samling, used in the flooring and the roof of the trailers, was not certified LFE.

After Hurricanes Katrina and Rita, FEMA awarded Gulf Stream Coach more than $500 million in contracts for more than 50,000 travel trailers. Gulf Stream’s was among the few no-bid contracts for travel trailers that FEMA awarded directly to a trailer manufacturer.

Jim Shea Jr. testified earlier in the trial that formaldehyde complaints were surfacing even before all of Gulf Stream Coach’s 50,000 trailers had been delivered to hurricane victims.

In March 2006, CNN picked up a story about formaldehyde poisoning from a Biloxi TV station and soon the formaldehyde issue was national news.

Soon after, Dan Shea wrote in an oft-cited letter to FEMA Logistics Management Specialist Supervisor Stephen Miller: “We remain ready, willing, and able to work with FEMA with regard to any complaint, including sending representatives within 24 hours to work with your contractors to inspect, test, or do whatever is reasonably necessary to address any complaint.”

Referring to that letter during Shea’s video testimony on Thursday, plaintiff counsel told Shea, “The e-mail you sent to Mr. Miller is not true. … Can you admit to me that it is not true so we can move on?”

After a back and forth for a few moments, Shea said, “It’s my understanding at this point, some three years later… that one of the key points here … there had been some question about the material specs requirement … and I told (Steve Miller) that we knew FEMA had a big task and that we would be willing to do whatever we needed to do to assist them.”

Shea continued: “I certainly think we had a proactive approach with FEMA. … We contacted them and told them then that we would like to advise any customers who had a complaint.”

Referring to FEMA’s letter to Shea, plaintiff lawyer Buzbee asked Shea: “Steve Miller wanted to know, `Does your field staff have the capability to put this issue to bed.’ What did that mean to you?”

“I thought he was asking if our field staff could test the trailers.”

“And you told him you would have someone down (to Louisiana) to test trailers on Friday.”

“Yes.”

“But you didn’t do that, did you?”

“No. We didn’t have the capability in three days.”

According to Buzbee, following the e-mail in which Dan Shea says he will have someone in Louisiana on Friday, there were no further e-mails from Gulf Steam to FEMA.